Excavation of the headrace tunnel at the
Theun Hinboun hydropower plant expansion project in Khammuan province cleared a
major hurdle on Sunday after almost a year of work.

Work on the tunnel, which is 5,250 metres
long, began in January this year with the use of the latest in excavation
machinery - the Tunnel Boring Machine (TBM). The machine meant excavation and lining
work was completed almost one month ahead of schedule. The project is the first
ever in Laos
to use the TBM. "The headrace tunnel is the most difficult
part of the project," said Assistant Project Manager Mr Sisouvanh Souvannaphasy
at a ceremony to celebrate the breakthrough.

Excavation of the tunnel is not only one
of the most expensive parts of the project, but also involves unforeseen
critical processes. "It involves expenditure of about 96.1
billion kip (US$12 million)," Mr Sisouvanh said. "Using the TBM, we can save time, money
and protect the environment and it's also more secure than using explosives." The TBM allows an average of 21.66 linear
metres to be excavated per day.

The completion of the tunnel was the basis
for the on-time completion of the rest of the project. Construction of the
whole project is now 62 percent complete, after commencing in May last year. "The tunnel is expected to be used to
generate energy by July 2012," Mr Sisouvanh said. Currently the installation of high voltage
power transmission lines is 67 percent complete, including the construction of
an 85km long 230 kilovolt (KV) line that will facilitate the export of
electricity to Thailand and a 51km long 115KV line that will be responsible for
supplying energy locally.

Building work on the Nam Ngouang and Theun
Hinboun powerhouses is now about 57 percent and 40 percent complete
respectively. The project is running on schedule, with all work expected to be
completed in June 2012. The Theun-Hinboun hydropower plant is
located in Borikhamxay province, with the expansion project underway in
Khammuan province. The expansion project will add a
generating capacity of 280 megawatts (MW) and is due to begin commercial
operation in July 2012.The project will cost the Theun-Hinboun
Power Company (THPC) around 6.2 trillion kip (US$720 million).

Sixty percent of the company is owned by
government shareholders, through Electricité du Laos, while Nordic Hydro
(Statkraft) and GMS Lao each hold 20 percent. The expansion project aims to improve the
distribution of energy both for local supply and export. It will also increase
generator capacity from 220 to 500MW, enabling the plant to produce more than
3,000 million kilowatt hours per year. Upon completion of the project, 440MW of
power will be sold to Thailand
with the remaining 60MW being sold to EDL for local supply. Currently the plant exports 95 percent of
its installed capacity of 220MW, with just 5 percent being put aside for local
supply.

THPC was the first independent hydropower
company in Laos,
beginning in 1995, and has operated successfully since 1998. According to the Energy Promotion and
Development Department of the Ministry of Energy and Mines, excluding the
mainstream Mekong River, Laos has the potential to generate
about 26,500MW from hydropower sources. Currently Laos has 15 power plants with a
total installed capacity of more than 2,170MW, according to a report from the
ministry's Planning and Statistics Division.